Report finds Lancaster County independent colleges contribute $538M to Pa. economy annually

• By Ashley Stalnecker/LNP | LancasterOnline

Lancaster County’s four independent colleges contribute roughly $538 million a year to the Pennsylvania economy, according to a report published earlier this month by the Association of Independent Colleges and Universities of Pennsylvania.

Collectively, Elizabethtown College, Franklin & Marshall College, Lancaster Bible College and the Pennsylvania College of Art & Design support 4,889 jobs and generate $46.3 million in tax revenue, the report found.

Combined, the colleges are one of the largest economic drivers compared to other member colleges in the region. They contribute more to the state economy than similar collections of independent colleges in neighboring counties such as Berks and Chester, whose schools create $303.4 million and $145.5 million in economic impact respectively.

Lancaster County is “special” by comparison to its neighbors, as it not only has more institutions of higher education, but offers a range of education opportunities, from Lancaster Bible College, a private religious school, to the city’s art college, said Ezra Rothman, president of Lancaster County Economic Development Company.

“There’s such a diversity of offerings here,” Rothman said. “That gives us the ability as a community to attract in and engage a much wider array of students and provide a much wider array of educational opportunities … and just adds to the dynamism of our economy.”

Lancaster County’s four colleges are among 83 association members who contribute $29 billion to Pennsylvania’s economy. To put that $29 billion in context, said Tom Foley, president of AICUP, that contribution is higher than several state budgets, including those of Arkansas, Colorado and Illinois.

“I don’t think people think about higher (education) that way, but it’s a job provider, it’s an economic generator,” Foley said.

The colleges’ economic contribution was determined using the IMPLAN software model, which estimates economic activities associated with a particular industry. In terms of higher education, that could look like a student grabbing lunch at a local business between classes.

A college’s economic contribution isn’t measured in only the direct contribution — the $15 a student spends on a few slices of pizza and a soda — but by spending at every step in the flow of resources, such as the cost of cheese to sprinkle on the pizza and the labor of the person popping it in the oven. Even the added spending a household can afford due to the increased demand for associated labor is factored in.

Lancaster County is part of the capital area region that comprises 11 institutions and contributes nearly $2.1 billion to the state economy. The nearby Philadelphia region is the largest region by impact ($15 billion) and number of institutions (29).

Lancaster County is also home to Millersville University, a public university that’s part of the Pennsylvania State System of Higher Education, and Thaddeus Stevens College of Technology, a state-supported two-year technical college, as well as satellite campuses for several colleges and universities including, HACC, St. Joseph’s University, Moravian University and Eastern Mennonite University. (Moravian and St. Joseph’s universities also belong to AICUP and are included in its report under the Lehigh Valley and Philadelphia regions.)

While the county’s state-supported schools receive annual financial support from state government, any dollars that filter down to the independent nonprofit colleges comes to them in the form of grant awards that the schools need to apply for.

Economic drivers

Pennsylvania College of Art & Design President Andy Barnes said the college has been aware of its economic and cultural impact on the community for a long time.

Barnes said the 400-student college employs local residents to teach its classes and run the school. Meanwhile, he said, students patronize local business from restaurants to art supply stores to galleries.

“Although we may be small, we make a big difference in Lancaster,” Barnes said.

Across the commonwealth, 279,000 students attending the association’s colleges and universities contribute nearly $3 billion to the economy in spending on entertainment, local restaurants and retail shopping.

Visitors coming to the association’s colleges for parents weekends, stage performances and other campus events contribute another $484 million in local spending.

Independent colleges and universities are also a significant part of the property tax base for K-12 schools — not the colleges themselves, which are tax exempt, but their work forces.

“They’re preparing people for the jobs of tomorrow,” Foley said, “but they’re also significant contributors to the community today.”

Beyond the money

The impact of the county’s independent colleges extends beyond the monetary.

For example, EDC leader Rothman praised Franklin & Marshall’s involvement in the James Street Improvement district which works to reduce crime and litter among other initiatives.

“From an economic development perspective, usually you look to your institutions… to take a lead on community partnerships,” Rothman said.

Lancaster Bible College was mentioned in the AICUP report for its counseling program in which students volunteer as counselor interns for Hope Within Counseling Services in Dauphin County, providing more than 400 sessions last year. Hope Within provides mental health services to the uninsured.

“Besides the financial and occupational aspects of an institution in existence for over nine decades, LBC students and graduates make an even deeper imprint, as they carry out God’s calling on their lives,” college President Tommy Kiedis said in an email Tuesday.

The economic and community impact of some colleges is significant enough, Foley said, that their shuttering likely would lead to the closure of peripheral businesses.

The pool of students colleges can enroll, though, is shrinking.

Colleges are facing a drop-off in the number of high school graduates due to a decline in the national birth rate that started around the time of the 2007 economic recession. Previous enrollment drop-offs that have threatened college enrollment were solved by colleges looking outside the U.S. and enrolling more international students, Foley said.

With the Trump administration’s tightening of the U.S. borders creating uncertainty surrounding student visas, however, international students don’t offer the same solution for higher education as they once did, Foley said, noting a 10% drop-off in international students attending member institutions in the upcoming school year.

Still, Foley said he’s confident the association’s member institutions, some of which have been around as long as the Constitution, can withstand such challenges. F&M, which enrolls 700 fewer students today than it did in 2012, was founded the same year as the constitution in 1787.

“What does that mean?” Foley said. “Well, that means they have survived two world wars, not one, but two pandemics, a Great Depression, a great recession, and they’ve always figured it out.”